Having the largest ATM network in India can be an enviable position. But for the country's largest bank, the State Bank of India (SBI), that seems to be hardly the case.
For, SBI has found its customers prefer the ATMs of competing banks. This has implications for business strategy, including revenue and recovering the cost on investment made in this alternate channel, according to senior SBI officials.
The bank has commissioned a study to get to the bottom of the trend.
During the April-September period, SBI's fees from ATMs have declined by 12.35 per cent to Rs 452 crore from Rs 515 crore in April-September 2011. The hits per day at its ATMs have also dipped to 272 during April-September from 285 during October 2011-March 2012 period.
|THE STUDY TO THROW LIGHT ON |
- Level of satisfaction with State Bank of India (SBI)'s automated teller machine (ATM) channel
- Adequacy of the value-added services at its ATM channel
- Drivers for SBI customers to use other banks' ATM
- Strategies competing banks use to attract users to ATM channel
According to one public sector bank executive, the alternate channel segment, especially the ATM mode, is witnessing rapid changes and is set for intense competition. On the one hand, public sector banks are going to install 63,000 new ATMs. On the other, non-bank entities have been allowed to set up and operate ATMs, called white label ATMs. This will further increase competition in the space.
SBI has floated an RFP (request for proposal) to rope in a consultant to carry out a study on ATM usage, expected to cover all 14 circles of the bank in the country. The sample size will be above 5,600, with a substantial number being non-SBI customers.
The assessment exercise and presentation of strategies for sprucing services will be spread over 12 weeks.
The study will analyse users' feedback on their overall experience with SBI ATMs. It will also assess users' familiarity with the various ATM services (withdrawal and other value-added services) and how often they use value-added services.
The study will do a comparative analysis of SBI ATMs' performance compared with that of other banks from a user's point of view. It will also look at strategies adopted by competing banks, including private and foreign banks, in attracting users to their ATM channel.